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Heed the sirens' calls when searching for dispute definition

legal matters

There is something about adjudication that brings out the Classicist in Mr Justice Jackson, the new judge in charge of the Technology and Construction Court (TCC), writes Kim Franklin. You may remember that he advised against using adjudication for large final-account disputes or professional negligence claims (AJ 18.11.04).

The needs of these complex claims are such that the parties are required repeatedly to extend the adjudication timetable, and incur ever more costs, for a decision that is, in the final analysis, non-binding. 'Do not be lured, ' he said, 'like Odysseus to the land of the sirens.' This promoted a Classical debate in itself.

The sirens were mythical hybrids, half-woman, half-bird, who lured sailors to certain death on the rocks by the sweetness of their singing. Did the judge in fact mean to caution against visiting the land of the lotus-eaters? People who ate of the lotus tree forgot their friends, lost all desire to return home and preferred to live in idleness in lotusland. Whichever is the more appropriate analogy will depend on your own perception of the process, but either way you can see that the judge has a downer on adjudication for certain types of dispute.

In Amec Civil Engineering v The Secretary of State for Transport (judgment 11.10.04), Jackson again called on his Classical repertoire to assist with a perennial problem in contested adjudication cases. Under the Construction Act, a party to a construction contract is entitled to refer a dispute to adjudication.

For the purposes of the Act, 'dispute' includes any difference. But when does a claim become a dispute? Applying the old adage that it takes two to argue, the mere making of a claim will not give rise automatically to a dispute. Similarly, simple failure to pay, or a request for more explanation or supporting information may not suffice. On the other hand, if a clear, well-documented claim is ignored, or gives rise only to time-wasting negotiations, when is the claimant entitled to call 'enough' and refer the matter to adjudication?

Hitherto, the courts' approach to this problem has not been consistent. In commercial cases, the Court of Appeal had ruled that if a claim is made and not paid, it is disputed. In adjudication cases, the TCC judges believed that it was necessary for a claim to be considered and rejected before a dispute could be said to have arisen.

In the Amec case, the judge distilled from what he described as 'the jungle of cases', seven pointers to help identify a dispute:

l the word 'dispute' does not have a special or unusual meaning conferred on it by lawyers;

l previous cases provide no hard-edged rules, but do give helpful guidance;

l the mere fact of a claim does not automatically give rise to a dispute;

l the circumstances from which it may emerge that a claim is not admitted are Protean. Proteus, we should remind ourselves, was herdsman to Neptune, the Greek god of the sea. He was famous for his power to assume myriad different shapes at will, to avoid being caught;

l the period of time from which a respondent may remain silent before a dispute is inferred depends heavily on the facts. Where the claim is notified to an agent, such as an architect or an engineer, who has a duty to consider the claim independently and give a considered response, more time may be required;

l deadlines do not automatically define a reasonable time;

l if the claim is so nebulous and ill-defined that it cannot be responded to sensibly, neither silence nor non-admission will give rise to a dispute.

These propositions were subsequently endorsed by the Court of Appeal in Collins (Contractors) v Baltic Quay Management (1994) (judgment 7.12.04) as 'broadly correct'.

As these cases demonstrate, the previous challenge of reconciling the two conflicting tests for a dispute, namely a claim made and not paid, and a claim made, considered, negotiated and rejected, has gone. Instead we have to capture the elusive Proteus or decide that the claim is defined so badly that it is not worth the effort.

Kim Franklin is a barrister and chartered arbitrator at Crown Office Chambers. Visit www. crownofficechambers. com

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